OneMain (NYSE:OMF) Releases Earnings Results, Misses Estimates By $0.05 EPS

OneMain (NYSE:OMF) posted its quarterly earnings results on Friday. The financial services provider reported $1.51 EPS for the quarter, missing analysts’ consensus estimates of $1.56 by ($0.05), Zacks reports. OneMain had a net margin of 13.92% and a return on equity of 23.49%. During the same period last year, the company posted $1.90 earnings per share.

Here are the key takeaways from OneMain’s conference call:

• Receivables growth accelerated 9% year over year to $28.1 billion, while originations increased 17%. Management raised its full-year managed-receivables growth outlook to the high end of its prior range, or 9%.
• Credit trends improved across the portfolio. Consumer-loan delinquencies and charge-offs declined sequentially and year over year, with management expecting lower year-over-year losses in the fourth quarter and further normalization toward approximately 7% in 2027, assuming a stable macroeconomic environment.
• The credit-card and auto businesses continued to scale rapidly. Credit-card originations rose 84%, purchase volume increased 82%, and receivables reached $1.4 billion, while auto receivables grew 16%; card charge-offs also fell 274 basis points year over year to 13.9%.
• Capital generation and shareholder returns remained strong. Quarterly capital generation rose 4% to $284 million, the company returned more than $500 million to shareholders year to date through dividends and repurchases, and management said incremental capital returns will increasingly favor buybacks while maintaining the current dividend.
• OneMain strengthened liquidity with $2.3 billion of ABS and unsecured debt issuance at attractive spreads, but funding costs are expected to remain around current levels and the overall reserve ratio is projected to rise to approximately 11.8% in the fourth quarter as the higher-reserve credit-card portfolio grows.

OneMain Stock Performance

NYSE OMF traded down $2.78 on Friday, hitting $56.56. 1,294,667 shares of the stock traded hands, compared to its average volume of 1,210,612. The firm has a market capitalization of $6.51 billion, a price-to-earnings ratio of 8.52, a PEG ratio of 0.65 and a beta of 1.24. The business’s fifty day moving average is $59.13 and its two-hundred day moving average is $58.51. OneMain has a 12 month low of $45.78 and a 12 month high of $71.93.

Insiders Place Their Bets

In other OneMain news, COO Micah Conrad sold 5,000 shares of the stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $65.40, for a total transaction of $327,000.00. Following the sale, the chief operating officer owned 91,250 shares in the company, valued at $5,967,750. This represents a 5.19% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Corporate insiders own 0.29% of the company’s stock.

Wall Street Analysts Forecast Growth

Several equities research analysts recently weighed in on OMF shares. Weiss Ratings downgraded OneMain from a “buy (b-)” rating to a “hold (c+)” rating in a report on Friday, October 16th. Royal Bank Of Canada lowered their price objective on shares of OneMain from $73.00 to $71.00 and set an “outperform” rating for the company in a research note on Friday, October 16th. Evercore set a $60.00 price objective on OneMain in a report on Thursday, October 1st. Deutsche Bank Aktiengesellschaft restated a “buy” rating on shares of OneMain in a report on Friday, July 10th. Finally, Barclays dropped their price objective on shares of OneMain from $61.00 to $60.00 and set an “equal weight” rating on the stock in a research note on Tuesday, July 7th. Eight research analysts have rated the stock with a Buy rating, four have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average target price of $67.09.

About OneMain

OneMain Holdings, Inc, operating under the OneMain Financial brand, is a consumer finance company that provides personal lending and related financial services primarily to non-prime consumers in the United States. The company serves customers through a combination of branch locations, online and mobile channels, and centralized customer service operations.

OneMain’s principal products include secured and unsecured personal loans, which customers may use for debt consolidation, home improvements, major purchases, and other personal expenses.